Rates & Fees
Visa & Mastercard Interchange Updates: Part 2
Card brand networks quietly updated their rate tables. Here’s the plain-language breakdown - and five things you can do right now to offset the impact on your margins before July 1.
Card brand networks quietly updated their interchange tables again ahead of Q3 2025. Several merchant categories are facing rate increases of 0.05%–0.15%, while a handful of verticals are seeing modest relief. Here’s the plain-language breakdown - and what you can do right now to offset the impact.
What Changed and When
Visa and Mastercard both update their interchange rate schedules twice a year - typically April and October. The Q3 2025 update, which takes effect July 1, introduces changes across 14 merchant category codes (MCCs). The changes are buried in 80-page PDF tables that most merchants never see. We’ve extracted the most impactful changes below.
Interchange is the fee paid by your acquiring bank to the cardholder’s issuing bank every time a card transaction is processed. It’s the largest component of your processing costs - typically 1.5%–2.5% of each transaction - and it flows directly from your processor to the card brands. You don’t pay it directly; your processor does on your behalf, then passes it to you as part of your rate.
The Rate Changes: Affected Merchant Categories
The following table shows the Q3 2025 changes by merchant category. Increases are marked in red; decreases in green. All figures are percentage points added to or subtracted from the base interchange rate for card-present consumer credit transactions.
| Merchant Category | Previous Rate | New Rate (Q3 2025) | Change |
|---|---|---|---|
| Restaurants & Food Service | 1.80% | 1.95% | +0.15% |
| Retail - General Merchandise | 1.65% | 1.73% | +0.08% |
| E-Commerce - Standard | 2.10% | 2.10% | No Change |
| Grocery & Supermarkets | 1.15% | 1.15% | No Change |
| Fuel & Gas Stations | 1.15% | 1.08% | −0.07% |
| Healthcare & Medical Services | 1.65% | 1.77% | +0.12% |
| Hotels & Lodging | 2.05% | 2.05% | No Change |
| High Risk - Nutraceuticals | 2.95% | 3.10% | +0.15% |
| Subscription / Recurring Billing | 2.20% | 2.33% | +0.13% |
| Business-to-Business (B2B) | 2.40% | 2.30% | −0.10% |
The 0.15% increase for nutraceutical and supplement merchants is the largest single-category increase in this cycle. At $50,000/month in volume, that’s an extra $75/month - or $900/year - added directly to your cost base with zero added value. Subscription merchants are also being hit hard, with a 0.13% increase that compounds with every recurring charge.
Why This Is Happening
The card brands cite several factors: increased fraud losses in certain verticals (particularly in the restaurant and healthcare categories), rising dispute resolution costs, and the ongoing cost of maintaining real-time authorization infrastructure. Critics in the merchant advocacy community argue the increases are simply margin expansion by Visa and Mastercard, both of which reported record profits in 2024.
The card networks increase interchange rates in a vacuum - there’s no competitive pressure, no regulator requiring justification, and merchants have no alternative. You accept Visa and Mastercard or you don’t accept cards at all.
- Payment industry analyst, Nilson Report Q1 2025The Durbin Amendment of 2010 capped interchange for debit cards from large issuers, but credit card interchange remains entirely unregulated in the United States. The Credit Card Competition Act, if passed, would introduce routing competition for credit cards - but it has stalled in Congress for the third consecutive session.
What You Can Do About It
Merchants aren’t powerless here. There are several concrete steps you can take to offset these increases:
- Switch to Dual Pricing / Zero Fee Processing. The most effective protection against any interchange change is removing credit card processing costs entirely. MIDsource’s Dual Pricing program lets you pass the service charge to card-paying customers, saving up to 95% of processing costs regardless of what rate increases the card brands impose.
- Encourage debit card payments. Debit interchange is capped under Durbin at $0.21 + 0.05% for large issuers. If your current setup doesn’t distinguish between credit and debit, you’re likely overpaying.
- Move recurring billing to ACH. Subscription merchants facing a 0.13% increase should seriously evaluate ACH for recurring charges. ACH processing typically costs $0.25–$1.00 flat per transaction - dramatically less than 2.33% on a $200 monthly subscription.
- Audit your MCC code. Many merchants are incorrectly coded, meaning they’re paying a higher interchange rate than their business type actually warrants. A five-minute review with your processor can sometimes yield immediate savings.
- Review your processing statement line by line. Most processors present interchange fees as a single bundled number. Request an interchange-plus breakdown and verify that the rates match what the card brands have published.
MIDsource’s Dual Pricing program is the most effective buffer against any interchange rate change. Because you’re no longer absorbing processing costs yourself, card brand rate increases simply don’t affect your bottom line. Learn how dual pricing works →
The Bottom Line
Interchange rate increases are a recurring reality of accepting card payments. The Q3 2025 changes are not catastrophic, but they are material - particularly for restaurant owners, healthcare providers, subscription businesses, and high risk merchants. The merchants who get hurt are the ones who don’t know the changes are coming, don’t understand their statement, and don’t take proactive steps to offset costs.
If you’re currently on a bundled pricing plan, now is the time to ask your processor for interchange-plus pricing. If you’re processing significant monthly volume, the Dual Pricing program may save you more per month than these increases cost. Contact a MIDsource specialist to review your current setup.
